Employment: Commission proposes €2.6million from Globalisation Fund to help workers in the Italian motorcycle industry

The European Commission has today proposed to release €2.6 million from the European Globalisation Adjustment Fund (EGF) to help 502 redundant workers from ten motorcycle manufacturers in the Italian region of Emilia Romagna with their re-integration into the labour market. The proposal now goes to the European Parliament and the EU's Council of Ministers for their approval.

EU Commissioner for Employment, Social Affairs and Inclusion László Andor commented: "Workers in the motorcycle sector in Italy have been hit hard by the worldwide financial and economic crisis. This proposal for 2.6 million euros from the European Globalisation Fund would help them to acquire new skills." He went on to state that "Redundancies on such a scale are a major shock to a regional economy. EU solidarity in helping to manage these difficult transitions is therefore important".

Italy applied for support from the EGF for 512 workers made redundant by ten manufacturers of motorcycles, spare parts and components in the region of Emilia Romagna. The package of personalised EGF co-funded measures aims to help the workers by offering them vocational guidance, training and re-qualification services, assistance with active job search and outplacement, entrepreneurship promotion and jobseeker allowances. 502 redundant workers who have not yet found a new job will be eligible to receive assistance from the EGF.

The total cost of the package is estimated at €4 million, to which the EGF would contribute €2.6 million.

Background

The redundancies effected by ten manufacturers of motorcycles, spare parts or components for the motorcycle and moped industry in Italy (which is Europe’s main producer thereof) are the result of the drop in demand for such vehicles throughout Europe (as demonstrated by the significant falls in registrations, by 42% for mopeds and 31% for motorcycles between 2007 and 2010).

European motorcycle and moped producers have also suffered as a result of the growth in exports of mopeds and motorcycles by Asia-based producers (China in particular is continuing to cement its position as the world’s foremost exporter of mopeds and motorcycles and accounted for 25% of the global export market in 2010). In ten years, Italy's share of the international export market has fallen by over 30% and the country has directly felt the effects of the crisis, linked to a 30% reduction in total production of motorcycles and mopeds between 2008 and 2010 and a 27% drop in registrations of motorcycles and mopeds between 2009 and 2010.

The territory concerned by the redundancies is in the region of Emilia Romagna in north-eastern Italy. The consequence for the regional labour market will be a sharp increase in unemployment, which has already been rising steadily in the region (from 3.2% in 2008 to 5.8% in 2010) and particularly affects young people in the 15-24 age group, where the unemployment figure rose by more than 11 percentage points between 2008 and 2010 (from 11% to 22.3%).

There have been 101 applications to the EGF since it started operating in 2007. Some €443.3 million has been granted, to help about 91 000 workers. EGF applications are being submitted for a growing number of sectors and by an increasing number of Member States. Liberalised trade with the rest of the world leads to overall benefits for growth and employment, but it can also trigger job losses, particularly in vulnerable sectors and for lower-skilled workers.

This is why Commission President Barroso first proposed setting up a fund to help those forced to adjust to the consequences of globalisation. The EGF was established at the end of 2006 and was designed to enable those who benefit from the opening-up of markets to demonstrate solidarity with those who face the sudden shock of losing their jobs as a result of this same development. In June 2009, the EGF Regulation was amended to strengthen the Fund’s role as an early intervention instrument forming part of Europe's response to the financial and economic crisis. The amended EGF Regulation entered into force on 2 July 2009 and applied to all applications received from 1 May 2009 to 30 December 2011. In the absence of an agreement in the Council, the EGF's crisis response function could not be prolonged beyond 2011.

Building on the positive results generated by the EGF since 2007 and its added value for the workers assisted in the regions affected, the Commission has proposed keeping the Fund in place within the 2014-2020 multiannual financial framework, while continuing to improve its operation.